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One of the palletizing cells in action. An algorithm sequences cases to arrive in the correct order to build a study, secure pallet for outbound store orders.

If you’ve ever seen Giant Tiger’s mascot, Friendly, you might wonder why he looks so happy. His smiling, stripy mug adorns countless trailers, more than 245 stores across the country and, notably, the side of the discount retailer’s giant (pun intended), new distribution centre near Prescott, Ontario.

But once you’ve been inside that DC you’ll understand Friendly’s cheerful demeanor. From the sunny and welcoming entry hall, through the staff facilities and out onto the operational floor, everything in the building is centered around creating a positive work environment.

So how does the privately owned retailer reconcile the human face with its reliance on pricey robotics? Mike Quinn, vice-president of warehousing and distribution, explains: “Knowing that labour would always be a concern going forward, we said ‘let’s get a good mix of robotics and manual or conventional-type warehousing, and let’s build and design a facility that people are going to want to work in’, because this would be our competitive advantage.”

People first

The discount retailer prides itself on its people-first attitude, which makes a lot of sense with the labour shortages many companies face in their distribution operations. And given that the company has moved its DC operations from Ottawa to Johnstown, Ontario, almost 100 kilometres away, but managed to retain more than 80 per cent of their distribution staff, clearly they are doing something right.

On the surface you can see the appeal of working in this building. There is an apple orchard for staff to use, the cafeteria is large enough to accommodate 50 to 60 people at once, with enough microwaves and fridge space for everyone who brings a lunch. Its soaring cathedral windows that provide a stunning view of ships on the St. Lawrence River also illuminate a games room mezzanine complete with pool tables and other diversions. Next to that is a fully equipped gym and a separate room for prayers or quiet reflection.

The view from the games room overlooking the welcoming, sunny lunch area.

The company lays on catered and subsidized lunches and dinners, which can be prepared in the commercial kitchen by the lunchroom, and in the summer there is a free BBQ at least once a week on the patio outside the lunchroom doors. Along with the apple orchard, the company is planning community gardens next summer so staff can grow their own veggies, doing the weeding and watering on their breaks if they like.

Planned for growth

The AS/RS unit dominates the DC floor. The three outbound palletizing cells, with their white robotic arms, can be seen atop the mezzanine.

The new DC is part of the company’s carefully planned expansion strategy, which will see it adding 10 to 15 new stores a year across the country. Work on the DC to serve those stores started back in 2014. A study showed that the optimal location would be along the 401 highway corridor in eastern Ontario.

“Armed with that analysis and a timely Google search, we discovered this fabulous site in 2015, nestled between the 401, and the St. Lawrence, and at the intersection of the 416 [highway],” said Paul Wood, the company’s CFO, at the DC opening in September.
With the 300-acre parcel secured, the company hired Deloitte and GKC Architects to help design a facility. According to Quinn, making the building pleasant and attractive for the staff was a first principle.

John Hubbard

But getting to the robotics was more of a stretch. After Deloitte put forward a number of manual options for material handling systems, they also suggested a robotic option. “‘This is Giant Tiger. We don’t do robotics’,” said Quinn, explaining the planning team’s surprised reaction. Further, the supplier being suggested was an unknown. At that time Symbotic had no installations in Canada.

Quinn said although their initial reaction was skepticism, after talking it through the ROI made sense and they decided to pitch it to the board of directors. He continues the story: “We sat in that room – there were two or three Deloitte people, and John [Hubbard, AVP warehousing] and myself, and we said okay, if we’re going to present this, we better be united on this one because they’re going to say the same thing. They’re going to say. ‘Gee, robotics? No way! What are you guys thinking?’”

But after weeks of practice, it turned out their pitch was perfect, and they got the board’s approval.

On the floor

Now complete but nowhere near full, the DC floor has a reserve area with up to 40,000 pallet positions. It’s all manually organized, using a fleet of Raymond mobile equipment.

The bulk of the DC’s product will eventually be held in the AS/RS shuttle unit, which covers 90,000 square feet. The structure is 15 levels high, and each level has double-high shelving. Those 30 shelving levels can store 440,000 cases, although at the time of the opening tour there were only 135,000 loaded in. According to Quinn, about 90 per cent of the DC’s SKUs will be managed through the Symbotic unit, which has a maximum cube size of 24 by 24 inches.

Inside, the 220 shuttle bots that can move at 45 km/h are “like little race cars,” said John Hubbard. “Those are the coolest things. They fly around and pick and receive. They put away cases. As they put away, they bring cases out to be palletized.”

Because only the front 20,000 square-foot portion of the shuttle structure is powered, Hubbard added: “If something were to happen, it’s up front, we don’t have to shut down the structure, we can actually troubleshoot it right at the front of the system.”

Palletizing magic

Jess Godin (Photo: Emily Atkins)

Working with the shuttle system are two automated inbound robots that pull cases off pallets and induct them into the system (at a pace of 1,750 cases an hour per station), and three outbound automated palletizers. These are all made-in-Canada robotics systems that use ABB robotic arms and are assembled by Axium out of Montreal.

The outbound units each have two tandem arms that work in sequence. They can palletize approximately 1,350 cases per hour. At full tilt, a pallet is built, wrapped, and sent on through the conveyor every two minutes.

The robotic palletizers are the showstoppers in this DC. “The technology is super cool. It literally brings tears to my eyes, and I could watch it all day long,” said Jess Godin, senior vice-president, supply chain. It’s true: Watching the robotic arms reach and rotate, keeping out of each other’s way as they build a pallet is mesmerizing.

And the pallets they build look solid. The pallet-building algorithm takes the store orders and calculates for about 15 minutes to plan the best, densest, tallest pallet. It uses the heaviest case for the bottom to ensure that as the pallet gets taller, the lightest pieces are on top.

A finished pallet has lowered through the mezzanine floor, been shrink-wrapped and is ready to be picked up and delivered to an outbound trailer. (Photo: Emily Atkins)

“With the robotics, we’re able to build dense pallets to the stores within which goods are positioned strategically to maximize the use of our trailers, minimize damage and facilitate quick and efficient product unload once the pallets reach the stores,” Godin said.

In fact, the pallets are designed so that as the stores unload them products are grouped according to the part of the store they will be displayed in. Orders are downloaded twice a day; stores get up to three deliveries a week, and the DC can pick, pack, and ship each day’s orders on the same day. Approximately 50 loads (or 100 store orders) leave the DC daily, much of it LTL, although in the holiday season those loads get bigger.

The system is able to forecast by looking at historical order data. It also looks at advertised volume and when Giant Tiger is expecting a spike in certain goods, it’ll pre-forecast those items. All this helps prevent out of stocks, Godin said. “The most important thing is making sure that there’s no interruption to our stores.”

Perfecting the system

Quinn noted that the implementation of the Symbotic system was seamless. “We’ve had no hiccups,” he said, but added that the goods-to-person picking of eaches and co-packs has not yet been perfected. Because goods-to-person is a new process for Giant Tiger and Symbotic, the IT department “likes to test and test and test.” Ultimately the less-than-case picks will amount to about 15 percent of the DC’s throughput, Quinn said.

Godin said the migration from three facilities to one was a delicate operation: “Doing all of this without interruption to our stores and customers was absolutely crucial and I equate this to doing open heart surgery on a marathon runner while they’re scaling a mountain.”

Room to grow

Even though they’ve just moved in, Giant Tiger is looking a long way down the road. By 2027 they expect to need to build out the DC, adding another 500,000 square feet. Quinn noted that the utilities are already in place for the expansion.

The Symbotic system is also designed to expand. “We knew we were going to grow with that type of system as well, so there was space at the far end of it, the north end for another cell of outbound,” Quinn said. “If you could lift up the floor panel, you’d see that it’s all prepped.”

For Godin, the growth challenge comes not in volume, but SKU variation. “If we just continued to grow with really beautiful, square boxes, my job would be really easy, but where I find the biggest challenge is translating what the growth, in terms of specific product categories are, into what the supply chain handling and distribution requirements are going to be,” she said.

In practical terms that means figuring out how to manage picking more individual units either to satisfy the stores so that they can increase their store turns and have a larger assortment in store with the same footprint, or if they start picking more e-commerce orders from the DC. If this happens, Godin said they will need to ramp up the each-picking technology faster than the case-pick options.

As for e-commerce, Giant Tiger now offers about 6,000 items online, with home delivery or in store pick-up. Godin said the long-term plan is to begin picking e-commerce orders in the DC. “We’re also really trying to not focus on the fact that it’s e-com. We’re trying to focus on the fact that it’s just retail and integrating any type of order, whether it’s a business-to-business order to the store or whether it’s a business-to-customer order, it’s just it’s part of the operations. As the e-com side of the business evolves, we’re continuing to figure out how to fit that into our operations productively.”

The Friendly philosophy

Giant Tiger is clearly very serious about its ambitious plans. The investment in this tech-heavy DC, potential omni-channel offerings and multiple new store openings all attest to the retailer’s commitment to growth.

The robotics will help the company alleviate the labour shortage. “It’s almost like you have a crystal ball and you can see the labour is not going to get better so you better be doing something different, and building the right culture and the people is something we’ve always done, and we just ramp it up every chance we get,” Quinn said. “The robotics can enhance the work, but they can’t replace all the people, so what we did here was create an environment where people are really, really enjoying coming to work.”

The bottom line is the company built the DC to be as welcoming and pleasant as possible to give themselves a competitive advantage.

“We’re not as big as some of those other companies, but we can make it a place where people would love to work, and maintain that culture, and then we’ll get the people wanting to work for Giant Tiger,” Quinn said.